Tuesday, February 14, 2012

History of Electronic Transformation in the Story of the San Jose Mercury News

I think I tweeted this article several months ago but I was reminded of it again during a pre-conference session at Tools of Change this morning. The article from the Columbia Journalism Review is a fascinating tale of how an established media outlet - one in many ways pre-disposed to change - struggled to make the right decisions, the right investments and do these at the right time.

By the time William Glaberson of the New York Times
came to visit in early 1994, some five thousand new AOL subscribers had
signed up to receive Mercury Center. The number, Glaberson noted,
represented less than 20 percent of AOL’s subscribers in the Bay Area
and less than 2 percent of the Merc’s readers. But Glaberson’s report in the Times was all that Ingle, Mitchell, and their staff could have asked for. Even with new sites at the Chicago Tribune, Gannett’s Florida Today,
and a handful of other papers, it had taken less than a year for
Mercury Center to emerge as arguably the most ambitious experiment in
how to weave the new technologies into an existing news operation.

It was not only the volume of services that set it apart, but the
extent to which the electronic services so dramatically expanded the
definition of what it meant to be in the news business. Mercury Center,
Glaberson noted, had carried an online chat with San Jose’s mayor,
offered its telephone-only subscribers recordings of Martin Luther King
Jr.’s speeches, posted press releases (much to the newsroom’s
consternation), and had also made available archives of all stories that
had appeared in the newspaper since 1985. The archives, which came with
an additional fee, had proven to be particularly popular. Ingle had
thought their greatest appeal would be to schoolchildren working on
reports. But the traffic was heaviest during the day, suggesting that
the biggest users were business people eager for information about their
industries and competitors.

Ingle told Glaberson that he was envisioning a new breed of
journalist, dispatched with the sort of equipment that would allow
filing in all sorts of ways, not merely for print. He called them
“multimedia reporters.” Still, for the print side, the connection
between the newspaper and Mercury Center involved little more than the
addition of codes at the bottom of printed stories, so that readers
could log on, or call in, for more. Some reporters had begun online
conversations with their readers (everyone was asked to respond to
reader e-mails). Others told Glaberson they saw the back and forth as
peripheral to their work.
.....

Christensen, a devout Mormon, was staking out a position that
bordered on business heresy. In the face of disruptive technology, he
wrote, the wise course was not to react to the demands of existing customers. It was imperative to lower
revenue expectations for the products spun off by those new
technologies. And it was essential to accept the inevitability of
failure. If sustaining technology brought reassurance, disruptive
technology sowed doubt.

Yates had been with Knight Ridder long enough to recognize how much
Christensen’s case mirrored what had taken place at her company. Knight
Ridder, under Jim Batten, had ended the Viewtron experiment because the
market was judged too small and the cost too high. But now Christensen
was presenting an argument suggesting that, in essence, the company had
had it all wrong—that because it had lost so much money it could not
appreciate that Viewtron did, in fact, serve a market, albeit a small
one that could, over time, develop into a far larger one, once the
technology became cheaper, accessible, and efficient. Once the personal
computer with a high-speed modem became a household fixture, the
newspaper would cease being the best way to read, and more importantly,
to search for jobs, employees, cars, and homes. That was the
moment of disruption. And when it occurred, the companies that had been
cultivating their shares of the emerging markets found themselves no
longer at the periphery, but, like eBay, in a position to dominate a
market that, not so long before, did not appear to exist.

As if by chance, Ingle had in 1990 come upon the very corrective in
Mercury Center that Christensen would prescribe seven years later—a
small, inexpensive laboratory for trying out those disruptive
technologies, a place where modest successes could be celebrated and
built upon, a “skunk works” operation that the company could keep
running as it waited to see whether the new markets might emerge, or
existing ones catch up.

Note: Christensen wrote The Innovators Dilemma which was also specifically referred to this morning.

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Michael Cairns

I enjoy discussing the publishing industry and in particular the changes that impact the business. On PND, I don't write about everything, just the things that interest me.

My career spans a wide range of publishing and information products, services and B2B categories and my operating and consulting experience has largely been with brand-name companies such as PriceWaterhouseCoopers, Macmillan, Inc., Berlitz International, AARP, R.R. Bowker and Wolters Kluwer.

I have served as a board member of the Association of American Publishers (AAP), the Book Industry Study Group (BISG) and in addition to my responsibilities at R.R. Bowker, l also served as Chairman of the International ISBN Executive Committee.